JPMorgan Says ‘Fog Of Uncertainty’ To Weigh On Markets For Rest Of 2025

Analysts at U.S. bank JPMorgan Chase (JPM) are forecasting a difficult second half of the year for global stock markets.

“We are not out of the woods yet on U.S. trade policies,” writes JPMorgan analyst Fabio Bassi, head of cross-asset strategy, in a note to clients.

Bassi adds that “self-inflicted policy damage (is) expected to take U.S. close to a recession” in the latter half of 2025.

The analyst and his team at JPMorgan, the world’s largest commercial bank, stress that regardless of short-term changes to U.S. President Donald Trump’s tariff policies, import duties will remain higher than forecast at the start of this year.

As such, Bassi writes that a “fog of uncertainty” is likely to weigh on global stock markets for the remainder of 2025, with equity prices slumping or trading sideways in coming months.

The note to clients is titled: “When will the fog of uncertainty lift?”

Of course, JPMorgan acknowledges that markets have proven to be resilient to Trump’s import tariffs so far, bouncing back from a 20% decline in April to retest all-time highs.

That said, JPMorgan Chase warns that the “pain trade” is likely on the horizon for investors, with a U.S. recession the biggest risk to markets in coming months.

Bassi and his team also remain bearish on the U.S. dollar and see limited upside for gold moving forward given its record run over the past 18 months.

JPMorgan notes that much will depend on the actions of the U.S. Federal Reserve and whether the central bank is prompted to lower interest rates in response to an economic decline and deteriorating labour force.

The benchmark S&P 500 index is currently at 6,071.50, back above its 50-day and 200-day moving averages and within 2% of its record high.